Mortgage Qualifying Rate (Stress Test) Changes June 1, 2021

On May 20, 2021 The Office of the Superintendent of Financial Institutions (OSFI) announced that they will be increasing the qualifying rate for uninsured mortgages effective June 1, 2021. You can read the announcement here. Shortly after the OSFI announcement the Minister of Finance announced that uninsured mortgages will be subject to the same qualifying rate that was just announced by OSFI. You can read the announcement here. Starting today, the new qualifying rate (stress test) will increase to 5.25% or the contract rate plus 2% whichever is higher for uninsured and insured mortgages. This is an increase from the current rate of 4.79% and will reduce your maximum qualifying amount by approximately 4%.

For example:

Household Income: $80,000

Down Payment: 5%

Current Preapproval: ~ $400,000

June 1, 2021 @ 5.25% ~ $382,000 – a reduction of $18,000

Please reach out to us if you have any questions about the changes and how they may impact you.